Sergio Marchionne, CEO of Fiat Chrysler Automobiles answers a question at the 2018 North American International Auto Show in Detroit. (Photo credit JEWEL SAMAD/AFP/Getty Images)

Fiat Chrysler Automobiles (FCA) shares slipped back slightly after CEO Sergio Marchionne threw cold water on speculation it might sell the Jeep SUV subsidiary. But the rally since the start of the year was holding up in European trading Thursday, with the shares still more than 30% higher on the year.

Analysts expect some spectacular action from Marchionne as he enters his last year before retirement, but they also point to some glaring weaknesses in the FCA empire, with Europe looking particularly vulnerable.

Marchionne, in a speech at the Detroit car show, said Jeep, expected to hit sales of 2 million this year, could help FCA double its net profit by 2022.

“We’re not going to break up anything. We have no intention of breaking it up and giving anything to the Chinese,” Marchionne was quoted by Reuters as saying.

FCA has already agreed the spinoff of components maker Magneti Marelli this year.

Professor Stefan Bratzel of the Center of Automotive Management (CAM) in Bergisch Gladbach, Germany, said FCA is clearly doing well in the U.S. with its highly profitable SUVs and pickup trucks but it has problems in Europe where it lacks scale.

“I think the situation with Fiat in Europe is quite bad. I can imagine there will be new efforts to sell some of its business because I don’t see a big future for FCA in Europe. It doesn’t have the technology to meet (E.U.) CO2 goals and the portfolio of cars is small and getting smaller. They also have a problem in China,” Bratzel said in an interview.

The only big seller in Europe is the little Fiat 500.

Fiat 500 Photographer: Tomohiro Ohsumi/Bloomberg

Investment researcher Evercore ISI was reassured by Marchionne’s various statements this week where he confirmed 2017’s profit guidance, repeated 2018’s targets and talked about doubling earnings by 2002 with the help of Jeep. Evercore ISI reiterated its 21 euro target price.

Around midday in Europe FCA shares were trading at 18.73 euros, off 0.43% on the day.

The shares have been driven higher by investors anticipating action like a spin-off of component makers Magneti Marelli and Comau, and hopes, now dashed for the time being, of a similar fate for Jeep. They still hope premium pretender Alfa Romeo and luxury sports car maker Maserati might up for grabs.

Speculation won’t go away that Marchionne’s long cherished ambition to be taken over by a bigger auto maker like General Motors might still be on the cards. Rumors of a possible linkup with Ford Europe, or perhaps a Chinese company eager to get a foothold in the U.S. via Chrysler and Europe courtesy of Fiat won’t go away.

Despite Marchionne’s insistence that Jeep is not for sale, Bratzel repeats a long-established rumor based on VW’s perceived weakness in SUVs suitable for the U.S.

“Jeep is interesting, it could be interesting for Volkswagen in the U.S.,” Bratzel said.

See wintonsworld.com for my analysis of movers and shakers in the global auto industry, plus road tests and video of the latest cars and SUVs. Follow me on Twitter @wintonsauto.

As a former European Automotive correspondent for Reuters, I’ve a spent a few years writing about the industry. I will penetrate the corporate hype and bluster and find out how these gigantic enterprises are really doing. I also love to drive their magnificent machines, and ...